How Much Cash Can You Keep in Chapter 7 Bankruptcy in Texas?

Money stress hits hard, and it can feel like everything is slipping at once. If you are eyeing Chapter 7, a big question pops up fast: how much cash can you actually keep? 

At Bankruptcy Texas Attorneys, we focus on bankruptcy law and are thoroughly familiar with the rules of Texas. Our team keeps things clear, practical, and focused on what protects you so that you can move forward with less worry.

Chapter 7 Bankruptcy and Asset Exemption

Chapter 7 clears many unsecured debts by gathering non-exempt assets and using them to pay creditors. The flip side is simple: exempt assets are protected, and you keep them. Texas offers strong exemptions, which means many filers can keep most of their property, including a fair amount of everyday cash, within set limits.

Knowing what counts as exempt is the key to planning a clean and safe filing. Once you understand the buckets, you can identify what fits and what requires more attention.

Cash Exemptions in Texas Chapter 7 Bankruptcy

In Texas, cash is generally protected under the personal property exemption. For a single adult, the cap is $50,000. For a family, the cap is $100,000. Your cash in checking or savings counts toward that cap, along with other personal items.

Some funds carry their own shield if kept separate and traceable, like Social Security, certain public benefits, and many retirement distributions. Mixing those deposits with other funds can blur the protection; therefore, maintaining separate accounts and accurate records is helpful.

• Cash on hand and bank balances are included within the personal property cap.
• Refunds, bonuses, and side income are typically treated as cash and then measured against the same cap.
• Funds from protected sources, if kept separate and documented, can hold their own exemption.

The number you can keep is not one-size-fits-all. It hinges on how your total personal property compares to the cap.

Texas vs. Federal Exemptions: Making the Right Choice

Texas allows you to choose either Texas exemptions or the federal standard, not both. The best choice depends on your assets, goals, and timing. Homeowners in Texas often opt for state exemptions, while renters sometimes prefer the federal list for its flexibility and convenience.

Consult with a knowledgeable attorney before filing your claim. A brief conversation can prevent costly mistakes and help you choose the setup that offers the most protection.

Exemption dollar limits under federal law adjust on a set schedule. Texas caps are set by statute. A tailored choice can save you real money.

Texas Exemptions That Can Protect Your Assets

Texas exemptions are generous, but you still need to fit the rules. Here are the most frequently asked questions that filers ask us about.

Homestead Exemption

Texas offers one of the strongest homestead protections in the country. You can protect an unlimited amount of equity in your primary residence, with acreage limits of 10 acres in a city or town, 100 acres in a rural area, and 200 acres for families in rural areas. This applies only to your residence, not rentals or investment properties.

This protection often drives the choice to use Texas exemptions. Many homeowners adhere to this rule in their homes.

Personal Property Exemption

Texas allows a single adult to protect up to $50,000 in listed personal property, and families can protect up to $100,000 in total. Your cash, household goods, tools, and similar items are included in that cap.

• Clothing, home furnishings, and essential household goods.
• Jewelry within limits, generally up to 25 percent of the cap.
• Family heirlooms, two firearms, athletic or sports gear, and pets.

The personal property cap is the central place your cash lives in a Chapter 7 filing under Texas law.

Motor Vehicle Exemption

Texas allows one vehicle per licensed driver in your household. The vehicle’s value is still measured within the personal property cap. The rule can also cover a car for a household member who relies on another person to drive.

This setup helps families that truly need multiple cars for work, school, and life.

Retirement Account Exemption

Tax-deferred and ERISA-qualified plans are protected under both federal and State law in Texas. Texas also protects retirement plans for teachers, state employees, and other public workers. Traditional and Roth IRAs are protected up to a high cap under federal law as well.

Do not use retirement funds to pay off credit card debt. Those accounts are usually safer left intact.

Important Considerations Regarding Cash and Exemptions

What you do before filing can hurt or help your case. Careless transfers or sales can turn protected assets into exposed cash.

• Do not sell non-exempt property to pile up cash right before filing. The cash can lose protection and raise red flags.
• Do not sell exempt property for cash. The cash proceeds usually do not keep the same shield.
• Avoid making large withdrawals or transfers near the time of filing your tax return. Trustees often review bank activity for the past few months and may ask tough questions.
• List everything, every account, every transfer, every asset. Full honesty keeps your discharge on track.

If you are unsure about a move, pause and get advice first. A quick check-in can save months of trouble.

How to Determine If You Qualify for Chapter 7

Eligibility turns on income and household size, measured against the Texas median. The means test examines the last six months of income and allowed expenses to determine if Chapter 7 is a suitable option.

1. Gather pay stubs, benefits statements, and profit-and-loss statements if self-employed.
2. Compare your average monthly income against the Texas median for your household size.
3. If your income exceeds the median, review your allowable expenses and secured debt payments to ensure you still meet the requirements.

A quick review of your numbers can help determine whether Chapter 7 is the best option or if Chapter 13 would be more suitable for your goals.

Take the First Step Towards a Fresh Start: Contact Bankruptcy Texas Attorneys

At Bankruptcy Texas Attorneys, our focus is simple: protect what you can keep, clear what you cannot, and help you breathe again. We listen, map out your options, and explain how Texas exemptions can shield your cash, home, and future. Feel free to call us at 817-338-1100 or contact us through our website to schedule a time to discuss.

You are not stuck with guesswork or mixed messages. Please bring your questions and paperwork, and we will review them together. A brilliant plan today can put you back in control faster than you think.